Mutations in the hepatocyte nuclear factor-1alpha (HNF-1alpha) gene cause maturity onset diabetes of the young type 3, a form of type 2 diabetes mellitus. In mice lacking the HNF-1alpha gene, insulin secretion and intracellular calcium ([Ca2+]i) responses were impaired following stimulation with nutrient secretagogues such as glucose and glyceraldehyde but normal with non-nutrient stimuli such as potassium chloride. Patch clamp recordings revealed ATP-sensitive K+ currents (KATP) in beta-cells that were insensitive to suppression by glucose but normally sensitive to ATP. Exposure to mitochondrial substrates suppressed KATP, elevated [Ca2+]i, and corrected the insulin secretion defect. NAD(P)H responses to glucose were substantially reduced, and inhibitors of glycolytic NADH generation reproduced the mutant phenotype in normal islets. Flux of glucose through glycolysis in islets from mutant mice was reduced, as a result of which ATP generation in response to glucose was impaired. We conclude that hepatocyte nuclear factor-1alpha diabetes results from defective beta-cell glycolytic signaling, which is potentially correctable using substrates that bypass the defect.